Layoffs and stock market performance during the COVID-19 pandemic: evidence from the US

PurposeThe authors examine the short-term stock market reaction surrounding US layoffs during the coronavirus disease 2019 (COVID-19) period. The authors’ specific interest is on any changes that may be observed in US stock markets during the COVID-19 outbreak. This information will help us assess the extent to which policymakers adopted at time revenue and expenditures measures to minimize its negative impact.Design/methodology/approachThe authors study the linkage between layoffs announced by firms and stock markets in US for the COVID-19 period between March 2020 and October 2020. This period shows important economic figures; a huge number of job cuts announced by blue-chip companies listed in the New York Stock Exchange (NYSE) due to widespread economic shutdowns. The authors examine whether and to what extent stock markets in US have reacted to layoff announcements during the COVID-19 pandemic using an event-study methodology.FindingsThe study’s results show that US layoffs during the pandemic did not cause any abnormalities on the stock returns, either positive or negative. Based on the mean-adjusted volume, the authors find that layoffs increase the stocks' trading volume, especially on the event date and the day following the event. US stocks become more volatile on the days following the event. Interestingly, on the event date, the authors find that stocks get the highest abnormal volatility; however, the result is statistically insignificant.Practical implicationsThe authors suggest that layoffs announcements follow the business cycle quite closely in most industries. The study’s results have implications for investors, regulators and policymakers as they permit to examine the effectiveness of the measures adopted.Social implicationsThe study’s results show that policymakers reduced uncertainty implementing intensive measures quickly and should follow similar policy in the future pandemic and/or unexpected events.Originality/valueThis paper contributes to the literature in two directions: First, to the best of the authors’ knowledge this is the first study that provides empirical evidence and assesses the extent to which a major global shock such as the COVID-19 pandemic may have altered the reaction of US stock markets to layoff announcements. Second, this is the first study on this topic that examines volume and volatility abnormalities, while the authors check the robustness of the findings with different methods to calculate abnormal returns.

Who Pays Attention to SEC Form 8-K?

The SEC requires public companies to disclose material information on Form 8-K within four days of a triggering event. We show that, on 8-K event and filing dates, there is significant abnormal attention on Bloomberg terminals, which are a source of information for institutional investors, while traditional media attention tends to be higher on filing days. Significant price discovery occurs on the event date and on the days between that day and the filing date. The traditional media coverage on the filing day appears to attract the attention of retail investors and leads to further price changes in the direction of the pre-filing day price change. Institutional investors exploit this price pressure via opportunistic liquidity provision. Overall, our evidence suggests that the Form 8-K filing may have little direct informational benefit, particularly to retail investors.

Impact of Geopolitical Risk on the Information Technology, Communication Services and Consumer Staples Sectors of the S&P 500 Index

We investigate the effect of geopolitical risk on the returns of firms in the Information Technology, Communication Services, and Consumer Staples sectors within the S&P 500 index. We use the event study methodology and perform more than 17,000 regressions to provide empirical evidence at sector level that geopolitical risk leads to different responses across these three sectors. The response of the Information Technology sector is negative for all event windows under study, except the one spanning 10 days prior to the geopolitical event and 10 days after. The Communication Services sector has positive returns as a result of geopolitical events for all event windows, except the one from the geopolitical event date and 5 days after. The Consumer Staples sector shows a negative impact on geopolitical risk for all event windows except the one from the geopolitical event date and 5 days after, demonstrating a negative correlation to the Communication Services sector.

Editorial Note

The 32nd Symposium of Malaysian Chemical Engineers (SOMChE2021) was the first of its kind to be held virtually on 15th and 16th July 2021, which was delayed due to the pandemic from its original event date in March 2020 to July 2021. SOMChE2021 was jointly organised by Swinburne University of Technology Sarawak Campus and the Institution of Chemical Engineers (IChemE) Malaysia. Presently, industrial chemical processes rely heavily on unsustainable fossil-fuel based resources. The theme “Navigating the Frontier of Sustainability” serves to address the ongoing global sustainability issues and present viable long-term solutions. SOMChE2021 has provided a platform for a wide community of young researchers, scholars, engineers, and practitioners to present their latest research findings and innovation in chemical engineering (and related disciplines) and to develop long-term research collaborations. A total of 75 delegates from Malaysia, Philippines, Taiwan, Indonesia, Brunei, Australia, and Japan have attended and presented their research findings at SOMChE2021, encompassing a diverse range of topics including green and sustainable processing, environmental and waste management, bioprocessing and biotechnology, materials science and engineering, and energy in terms of energy conversion and management, and renewable and alternative energy. These proceedings serve as a compilation of publications that showcase the progress in engineering and science to bridge the gap between research and industry in solving sustainability concerns, of which all accepted papers have undergone stringent screening and review processes. Overall, the success of SOMChE2021 was made possible through the collective contribution of the Organising Committee, International Scientific Committee, and Sponsors. Editors Assoc. Prof. Jaka Sunarso, Ir. Dr. Ngu Lock Hei, Dr. Chew Jiuan Jing, Dr. How Bing Shen, Dr. Elaine Yeu Yee Lee, Dr. Mahmoud Ahmed Mussad Elhadi, Dr. Siti Salwa Hashim, Dr. MD. Bazlul Mobin Siddique, Ms. Lai Jia Chi, Dr. Claudia Li Chia Chirng, Ms. Megan Soh Zheyin, Ms. Lai Jia Yen, Ms. Liza Melia Anak Terry, Ms. Shirleen Lo Lee Yuen, Ms. Karen Kong Gah Hie, Ms. Adeline Lim Kher Li, Mr. Luke Ngu Wei Wei, Mr. Slyvester Chai Yew Wang, Mr. Frederick Phang Jit Fook, Mr. Jonathan Cheng Lin Yang, Mr. Wong Jung Lin, Mr. Yeo Lip Siang. Swinburne University of Technology Sarawak Campus. List of titles Organising Committee, International Scientific Committee, Sponsors are available in this pdf.

The Relation Between Trading Volume Concentration and Stock Returns

The Taiwan Stock Exchange discloses data on daily trading volume across brokerage firms for each listed stock. Market practitioners suggest that the concentration of trading volume contains information on the trading behaviors of big players. We use the Gini Coefficient to measure the degree of concentration, upon which a trading strategy is proposed. We conduct an event study to examine whether such a strategy will yield abnormal returns. Our sample contains 375 listed companies with events identified during the sample period from February 2020 to August 2020. The empirical results show that the trading signal based on the Gini coefficient is informative and that most of the average abnormal returns after the event date are significantly positive with the cumulative average abnormal returns increasing almost monotonically up to the end day of the event window. Consistent with prior studies in which different measures of concentration are utilized, our findings provide additional evidence that the Gini Coefficient could help investors to develop profitable stock selection and market timing strategies.

COVID-19 on the Telecommunications Industry Stock Market Performances: An Event-Study Approach

This study aims to analyze the knowledge quality of the COVID-19 pandemic event regarding the Indonesian stock market's performance as seen from the average abnormal return before and after the first case of COVID-19 Indonesia on March 2, 2020. The research design used in this study is an event study. Three samples used in this research are companies engaged in the telecommunications subsector in the Indonesia Stock Exchange. The technique of sampling that was used in the research was purposive sampling. The study focused on the window period 15 days before and 15 days after the event date. Hypothesis testing is done by using paired sample t-test on data that is typically distributed and the one-sample Wilcoxon signed-ranked test on data that is not yet normally distributed. The result obtained is that there are no significant differences before and after the announcement of the first case of COVID-19 in Indonesia.

Medications in Patients with Dementia and Behavioral Disturbance

Background: Behavioral disturbance (BD) is common in dementia patients, with no FDA approved medications for this condition. Little data exists on the real-world medication use in this population. Objective: To describe real-world medications use in this population. Methods: A cross-sectional study was conducted using the MarketScan database for outpatient medications and the Cerner database for inpatient medications. The study period was Oct 2015–Jun 2018. Patients with dementia and BD were identified through ICD-10-CM. We examined outpatient medications prescribed during 6-month before or after BD event date, and inpatient medications during inpatient visits, especially on central nervous systems (CNS) drugs including antidementia drugs, antidepressants, antipsychotics, anxiolytics, and anticonvulsants. Results: A total of 56,544 outpatients and 34,245 patient hospitalizations were assessed separately. Among outpatients, patients filled more medications after a BD event. The use of the five CNS drug classes generally increased after a BD event, and the largest increase was seen in antipsychotics (23%to 33%). Among inpatients, the median number of medications used in each hospitalization was 14. The use of antipsychotics was particularly high (64%), followed by anxiolytics (51%). A list of 60 unique medications were suggested to be the commonly used drugs in dementia patients with BD. Conclusion: In dementia patients with BD, anti-dementia medications, antidepressants, anticonvulsants, hypnotics and antipsychotics were the most used drug classes. Antidepressants and antipsychotics use were more frequent after a BD event, which suggests a need for safe drugs targeting BD in dementia patients.

Chemoprotective effect of metformin against HR+/HER2- breast cancer among women with type-2 diabetes.

10518 Background: Type-2 diabetes mellitus (T2DM) increases the risk of breast cancer among postmenopausal women. Metformin has demonstrated a chemoprotective effect in breast cancer, however its role in HR+/HER2- breast cancer (HR+/HER2- BC), the most common subtype, has not been studied among older women with T2DM in the United States. This study evaluated if increased exposure to metformin is associated with a reduced risk of HR+/HER2- BC among postmenopausal women with T2DM. Methods: A case-control study was performed using the Surveillance, Epidemiology, and End Results (SEER)-Medicare data (2008-2015). Those diagnosed with HR+/HER2- BC as their first/only cancer after incident T2DM diagnosis were cases. The event date was the date of HR+/HER2- BC diagnosis in cases, and randomly assigned to non-cancer T2DM controls based on the distribution in cases. Cases were matched to up to 4 controls each using incidence density sampling with replacement. Metformin exposures were defined as cumulative dose, average intensity and adherence, measured during the 1-year lookback period prior to the event date. Dose (mg) was categorized as: 0, 0-30,000, 30,001-136,000, 136,001-293,000, and > 293,000. Average intensity per day (mg/day) was categorized as: 0, 1-500, and > 500. To evaluate adherence, those without metformin claims during the lookback period were excluded. Adherence measures were: binary proportion of days covered (PDC) (≥0.80, < 0.80) and adherence trajectories. Group based trajectory modeling was used to identify trajectories (adherent, slow decline, rapid decline, and early discontinuation). The Anderson Behavioral Model was used to guide selection of covariables: demographic and clinical variables (diabetes severity, metabolic syndrome, comedications, and health status). Conditional logistic regression was used to evaluate the association between exposure to metformin and the risk of HR+/HER2- BC. Results: The main cohort included 690 cases and 2747 controls. A decremental reduction in odds of HR+/HER2- BC in the highest cumulative dose (OR = 0.72, 95% CI: 0.55-0.95; OR = 0.60, 95% CI: 0.42-0.85) and intensity (OR = 0.61, 95% CI:0.46-0.82) categories of metformin was observed compared to the no-metformin group. Those non-adherent to metformin had 45% (OR = 1.45, 95% CI: 1.08-1.94) increased odds of HR+/HER2- BC compared to those adherent. The risk of HR+/HER2- BC in the adherent (OR = 0.67, 95% CI: 0.39-1.14), slow decline (OR = 0.75, 95% CI: 0.43-1.32) and rapid decline (OR = 0.73, 95% CI: 0.41-1.31) trajectories was not statistically significant compared to the early discontinuation trajectory. Conclusions: This retrospective study based on SEER-Medicare found an association between high dose and intensity of metformin use with reduced odds of incidence of HR+/HER2- BC among postmenopausal women with T2DM. Adherence to metformin also showed protective effect against HR+/HER2- BC.

DAMPAK COVID-19 TERHADAP PERUBAHAN HARGA SAHAM

Penelitian ini bertujuan untuk mengetahui reaksi pasar modal terhadap adanya pengumuman masuknya Virus Covid-19 ke Indonesia. Data penelitian diambil pada saat pengumuman masuknya Virus Covid-19 ke Indonesia, diberlakukannya kebijakan PSBB dalam rangka menanggulangi pandemic Covid-19, kemudian pada saat pengumuman dijalankannya kembali moda transportasi. Event window yang digunakan dalam penelitian ini adalah 11 hari,dimana 5 hari sebelum dan 5 hari sesudah hari sesudah pengumuman event dan 1 event date pada hari tersebut.Hasil paired sample t-tes, menunjukkan terjadi perbedaan signifikan pada harga saham sebelum dan sesudah diumumkannya kasus pertama covid-19 di Indonesia. Hal ini ditunjukkan dengan nilai signifikasi 0,00 < 0,05. Dimana harga saham mengalami penurunan dibandingkan sebelum adanya kasus covid-19. Sedangkan pada saat diberlakukannya kebijakan PSBB dan pengumuman dijalankannya kembali moda transportasi, tidak terjadi perbedaan yang signifikan pada harga saham sebelum dan sesudah event tersebut.

Spatial tale of G-7 and BRICS stock markets during COVID-19: An event study

The unprecedented outbreak of COVID-19 has affected every aspect of the human life, be it health, social, or economic dimensions. The anxiety and uncertainty wobbled the economies of affected countries worldwide. This study attempts to quantify the impact of COVID-19 on the performance of major stock markets of G-7 nations vis-à-vis BRICS nations. An event study methodology is employed to capture the effect of the systematic event in the form of Buy and Hold Abnormal Returns (BHAR) and Average Buy and Hold Abnormal Returns (ABHAR). The study considers a 90-day observation window, consisting of six sub-event windows after the COVID-19 news up-doves the world, and 120 days prior to the selected event date to estimate average expected returns. BHAR values in the four event windows are statistically significant, covering stock markets from panic and nosedive to their correction and recovery. ABHAR values reported are significantly negative in the event window ranging from –0.15% to –38.43% for G-7 and –0.06% to –37.12% for BRICS nations. Despite similar ABHAR trends, the BHAR values and correlation matrix exhibit a diverse reaction in BRICS nations compared to the highly synchronized reaction in the G-7 group of nations in the COVID period.